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Approach

Every client’s inquiry is unique. Our job is to provide the customized options-based solutions that exactly meet our clients’ needs.

WORKING TOGETHER

Because of our focus and deep expertise, Carapace Financial is able to help advisors seamlessly mitigate their clients’ everchanging risks and access rapidly evolving opportunities. Our strategies not only have the potential to generate improved investor outcomes but, critically, differentiate advisors’ investment capabilities in a marketplace that grows more homogenous each day.

  1. Hedge Concentrated Positions

    With the historic run-up in the equity markets since mid-2020, many investors have overweight and often volatile low-tax basis stock positions in their portfolios. Carapace Financial works closely with advisor clients to customize tax-efficient strategies that hedge downside risk on their concentrated positions and provide peace of mind.

  2. Invest for Protected Growth

    The Carapace Protected Growth Strategies seek to reduce downside market risk on new equity investments while preserving potential upside appreciation to a capped level. New Protected Growth Investments are constructed by purchasing equity portfolios approved by the client and overlaying each cash investment with customized exchange-traded put and/or call options. With six flagship Protected Growth Strategies to choose from, clients can be sure that each new investment is tailored to meet their particular risk and return requirements.

  3. Invest for Income

    Carapace Financial offers clients two Income Strategies. The Carapace Secured Put Strategy seeks to provide high income from: 1) the purchase of a U.S. Treasury security; and 2) the sale of out-of-the-money put options referencing each stock in a large-cap equity portfolio. Carapace Financial believes that this Strategy is an attractive low-volatility / high-income supplement that also allows advisors to tactically deploy client capital in a high valuation market. Likewise, the Carapace Covered Call Strategy offers clients a high-income alternative but with the additional benefit of significant upside appreciation potential. Carapace Financial recommends this reduced-volatility Strategy for clients seeking an attractive income supplement with growth potential.

  4. Invest for Enhanced Appreciation

    The Carapace Accelerated Growth Strategy seeks to provide enhanced upside appreciation potential on an equity investment through the purchase and sale of call options. Carapace Financial favors this Strategy in a moderately rising market as a way to generate alpha without adding to downside market risk exposure.

process born of experience

RESEARCH

For each engagement, we analyze the characteristics of the underlying equity portfolio.

We assess the availability and depth of the exchange-listed options corresponding to the reference equity portfolio.

CUSTOMIZE

We conduct a rigorous comparative analysis of viable solutions to design an optimal strategy and establish target parameters.

Options expiries and strike prices are selected based on this analysis.

IMPLEMENT

All legs of the options strategy are implemented simultaneously to lock in the target parameters.

Limit orders are utilized to ensure pricing and execution is in full alignment with strategy design.

MONITOR and MANAGE

Positions are continually monitored to ensure consistent alignment with desired outcomes, and to identify opportunities for enhancement given market/security action.

Carapace Strategies: Solutions Made Simple

Across investment vehicles and strategies, Carapace Financial delivers the differentiated solutions investors need – and expect.

SEPARATELY MANAGED ACCOUNTS

  • DESCRIPTION

    Carapace delivers customized hedging strategies in separately managed accounts on multiple custodial platforms.

  • CARAPACE ROLE

    Sub-Advisor

  • INVESTOR TYPE

    RIA client

  • Minimum number of investors

    1

  • Minimum aggregate amount

    NA

  • Minimum investment per invESTOR

    $100,000

  • DOCUMENTATION

    Sub-Advisor Agreement

  • Custodians

    Schwab, Pershing,
    Interactive Brokers

PRIVATE FUNDS

  • DESCRIPTION

    The Carapace Fund is a Delaware multi-series LLC that allows qualified purchasers and accredited investors to access our managed strategies through individually customized private fund series.

  • CARAPACE ROLE

    Manager

  • INVESTOR TYPE

    Qualified purchaser (QP)

    Accredited investor (AI)

  • Minimum number of investors

    QP - Up to 2,000 per Series

    AI - Up to 100 per Series

  • Minimum aggregate amount

    $10 Million

  • Minimum investment per INVESTOR

    $100,000

  • DOCUMENTATION

    PPM/Explanatory Memorandum/ Subscription Agreement

  • Custodian

    Schwab, Pershing, and Interactive Brokers

MARKET-LINKED NOTES

  • DESCRIPTION

    Carapace Financial works with large bank issuers to deliver customized and competitively-priced market-linked notes to institutional investor clients.

  • CARAPACE ROLE

    Advisor

  • INVESTOR TYPE

    Institutional Investor

  • Minimum number of investors

    1

  • Minimum aggregate amount

    $1 Million

  • Minimum investment per INVESTOR

    Institutional Investor Discretion

  • DOCUMENTATION

    SEC Prospectus / Pricing Supplement

  • Multi-Issuer Platform

    Bank of America , CitiBank,
      Goldman Sachs, J.P. Morgan,
      Morgan Stanley, Wells Fargo